EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO 49
ISSUED BY THE AUTHORITY OF THE MINISTER FOR FINANCE
SUBJECT: SUPERANNUATION ACT 1976 - SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)
Section 168 of the Superannuation Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which the Act requires or permits to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to the Act.
The Act makes provision for and in relation to an occupational superannuation scheme for persons employed by the Commonwealth and for certain other persons.
Under the Act, the rate of fortnightly contributions payable by an eligible employee (contributor) is expressed as a percentage of the fortnightly rate of his or her salary. In accordance with sub-section 3(1) of the Act, “fortnightly rate of salary” in relation to a contributor means an amount equal to one-twenty-sixth of the amount of his or her annual rate of salary.
The rates of employer-financed invalidity, age and early retirement pensions payable under the Act are expressed as percentages of the former contributor’s final annual rate of salary. In accordance with sub-section 3(1) of the Act, “final annual rate of salary” means, in the generality of cases, the person’s annual rate of salary on his or her last day of service.
Sub-section 5(1) of the Act provides that “salary” means salary or wages and:
(a) includes any allowance, or the value of any allowance, or any fee, that is an allowance or fee of a kind that, under the regulations, is to be treated as salary for the purposes of the Act and any partial invalidity pension payable; but
(b) does not include any part of any salary or wages that, under the regulations, is not to be treated as salary for the purposes of the Act.
Sub-section 5(2) provides that, subject to sub-section 5(3), the “annual rate of salary” of a contributor on a particular day is an amount equal to the amount per annum of the salary for the purposes of the Act payable to the
contributor on that day. Sub-section 5(3) provides that the regulations may provide that, in a case specified in the regulations, the annual rate of salary of a contributor on a particular day shall, for the purposes of the Act or a provision of the Act specified in the regulations, be an amount equal to such amount per annum as is ascertained under the regulations.
Regulations for the purposes of section 5 are contained in the Superannuation (Salary) Regulations (the Regulations).
Part II of the Regulations (regulations 4 to 8) sets out the allowances other than shift allowance that are to be treated as salary for the purposes of the Act and the conditions under which certain of those allowances are to be so treated.
Part IIA of the Regulations (regulations 8A to 8E) sets out the conditions under which shift allowance will be treated as salary for the purposes of the Act and establishes the annual rate of salary of a person whose salary includes shift allowance.
Part IV of the Regulations (regulations 12 to 17) sets out the annual rate of salary for the purposes of the Act of a person who is on leave of absence without pay and who is contributing under the Act during that leave.
Part V of the Regulations (regulations 18 to 20) contains miscellaneous provisions which make provision for certain persons transferred outside the Australian Public Service, the variation of salary with retrospective effect, and arrangements for certain redeployed officers of the Australian Public Service.
The Act as it applies to persons who are approved part-time employees has been modified, pursuant to sub-section 155(2) of the Act, by the Superannuation (Approved Part-time Employees) Regulations. The Superannuation (Approved Part-time Employees) Regulations modify section 5 of the Act as it applies to an approved part-time employee to provide, in a new sub-section 5(2A), that the annual rate of salary of an approved part-time employee is the amount per annum that would be payable to the person if the person was performing his or her duties on a full-time basis excluding, where the person is a prescribed partial invalidity pensioner, any partial invalidity pension payable to the person. Salary for the purposes of the Act continues to be the amount provided for in sub-section 5(1) of the Act.
The amendments to the Superannuation (Salary) Regulations will ensure that the intention of the new sub-section 5(2A) is extended to the Regulations. The opportunity has also been taken to make some minor amendments of a drafting nature. The amendments are outlined in the Attachment.
The amending regulations operate from the date of their gazettal which is the same date as the date from which the Superannuation (Approved Part-time Employees) Regulations will operate.
ATTACHMENT
SUMMARY OF THE PROVISIONS OF THE SUPERANNUATION (SALARY) REGULATIONS (AMENDMENT)
Regulation 1
Provides that in the Regulations “Principal Regulations” means the Superannuation (Salary) Regulations.
Regulation 2
Regulation 2 amends regulation 8D of the Principal Regulations which provides for the calculation of the annual rate of salary of certain contributors whose salary includes shift allowance. Regulation 8D is amended to ensure that, where the contributor was an approved part-time employee during all or part of the period over which the annual rate of salary is determined, the amount received as salary, allowances to be treated as salary, or an amount received as shift allowance, as appropriate, during that period will be converted to a full-time rate provided, in the case of allowances other than shift allowance, those allowances have been paid to the person at a part-time rate. This amendment is in accordance with the intention of the modification of section 5 of the Act by the Superannuation (Approved Part-time Employees) Regulations which provides that the annual rate of salary of an approved part-time employee is the annual rate of salary that would have been payable to the person if the person had been performing his or her duties on a full-time basis. A number of minor drafting changes are also made to regulation 8D.
Regulation 3
Regulation 3 amends regulation 8E of the Principal Regulations which provides for shift allowance to be treated as salary for the purposes of the Act in certain circumstances where a person dies or retires on invalidity grounds and provides for the calculation of the annual rate of salary of the person. The amendments to Regulation 8E reflect the amendments to regulation 8D.
Regulation 4
Paragraph 12(b) defines the notional salary of certain persons who while on leave without pay are permitted to continue to contribute under the Act. Sub-regulation 13(3) provides that their notional salary is their annual rate of salary for the purposes of the Act. The notional salary of the person on a particular day during the leave
is the amount that would be the person’s salary for the purposes of the Act if on that day he resumed the employment by reference to which his salary for the purposes of the Act was established immediately before he commenced leave without pay. The amendment to paragraph 12(b) will ensure that where the person was an approved part-time employee immediately before commencing leave without pay his notional salary will be established by reference to the amount that would have been his annual rate of salary had the person been performing duties on a full-time basis immediately before proceeding on leave. This amendment is in accordance with the intention of the modification of section 5 of the Act by the Superannuation (Approved Part-time Employees) Regulations. This provision is also amended to clarify its intention.
Regulation 5
A number of amendments to the Regulations are made in the Schedule
SCHEDULE
The amendments made by the Schedule are as follows:
Sub-regulations 13(3), 19(1), 19(3), 19(4), 19(5), 20(5)
The amendments to these provisions are drafting changes intended to clarify that the amount that is established as the annual rate of salary of a person in accordance with these provisions is an amount per annum.
Paragraphs 14(b)(i) and (ii)
The amendments to these paragraphs change the references to Level 3 in the Second Division (paragraph 14(b)(i)) and Class 11 in the Third Division (paragraph 14(b)(ii)) in the Australian Public Service to the current (equivalent of those classifications, that is, Senior Executive Level 3 and Clerical Administrative Class 11, respectively. These changes are proposed because of the abolition of the Divisional structure of the Australian Public Service from 1 July 1984 by section 15 of the Public Service Acts Amendment Act 1982 and the determination by Public Service Board Determination No 19 of 1984 operative from 30 June 1984 of Senior Executive and Clerical Administrative classifications.
Regulation 14
The amendment to regulation 14 will ensure that an annual rate of salary of a person established in accordance with this provision is the full-time rate of salary payable to
the holder of the appropriate classification. This amendment is in accordance with the principles of the modification of section 5 of the Act by the Superannuation (Approved Part-time Employees) Regulations.
Sub-Regulation 15(1)
The amendment to sub-regulation 15(1) will provide that, when determining whether the annual rate of salary of a contributor who is on leave without pay is higher than his initial annual rate of salary while on that leave, actual salaries are to be compared. This will ensure that where a person changes from full-time to part-time employment while on leave without pay the regulations can operate as intended.
Sub-regulations 15(2), 15(3), 17(1), 17(2), 17(3), 18(1) and 19(2)
The amendments to these provisions will ensure that where they provide for an annual rate of salary of a person who is an approved part-time employee the annual rate of salary will be the amount that would have been the person’s annual rate of salary if he had been performing his duties on a full-time basis. This amendment is in accordance with the intention of the modification of section 5 of the Act by the Superannuation (Approved Part-time Employees) Regulations.